3559_CAAP_Blog (1)-1Airline executives know that a more successful revenue management department starts with strategies that incorporate market and owned data and pinpoint revenue opportunities. These strategies drive coordinated decision making among revenue management, sales and network planning departments. But most importantly, they help revenue management analysts be more proactive. RM analysts who spend most of their day proactively identifying revenue opportunities constantly outperform. Thus, creating and implementing revenue management strategies that drive proactive workflows ought to be an important part of every revenue management team’s agenda.

However, according to ZS’s research, some are falling short: 45% of analysts’ time is spent on reactive activities, such as emailing, unproductive meetings and executive report generating. Furthermore, current revenue management strategies do not maximize potential benefits across the network, and inconsistent revenue management strategy implementation across revenue managers and available systems result in missed revenue opportunities at different levels.

Analysts’ daily workflows can be improved with standardized training and a department-level focus on proactive activities, such as strategic review, market analysis and forecast management. Here’s our recommended approach for improving analyst productivity and increasing revenue opportunities, overall:

  • Identify areas of opportunity: Analyze opportunities from data dashboards and determine what strategies would drive revenue.
    • What incremental revenue exists in each major market?
    • Which itineraries and points of sale drive the revenue gain for each market?
  • Assess and align on strategies that will benefit the whole network: Figure out what the network impact of the strategy is, and whether the strategy for a particular route will affect the performance of other routes. Determine the highest level at which the strategy can be implemented, and how well it aligns with the sales team’s strategy by meeting regularly with sales teams to get feedback and keep them informed. The reasons behind each of the implemented revenue management strategies should be explained.
  • Implement strategies through forecast and availability influences: Model the strategy into your RM system forecaster and availability controller. Inform all stakeholders (other analysts and sales teams) about estimated impact through regular check-ins.

  • Measure impact: Verify revenue per available seat kilometer (RASK), yield, load factor and overall revenue changes. Analyze shifts in booking curves at different class-of-service levels like business, premium economy and economy, and across different fare families. Determine whether the forecast influences are having the expected impact on availability, the impact of the strategies on the route’s RASK and how you should correct the revenue management system forecast for the future.

By following this roadmap, analysts can better identify and execute opportunities, including improving yield and load factor through more proactive management of customer segments, channels and high and low compression periods – and, ultimately, generate more revenue for your department.


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Topics: Travel and Transportation, Airlines, Revenue Management, travel and tourism, data and analytics